Props to DeSantis/Senate for tort reform in regards to Florida insurance

The rush to file had absolutely NOTHING to do with multipliers. The rush had to do with the dramatic change to the statute of limitations (from 4 years to 2 years) which was raced into action.

 

Thanks for this. That makes sense.

Do you have any thoughts on the multipliers? Good bad indifferent?

 

I am not a PI lawyer, but I know a little to be dangerous.
Here’s my general thoughts. Remember, the lawyer taking the cases on behalf of the insured is taking the case on a contingency basis — he is not paid unless there is a recovery. The insurance company lawyers get paid win, lose or draw, based on their time billed (like the “load star” (hours worked times reasonable rate).

As such, the insured’s lawyer has obvious risks — no fee if the insured loses the case. Why would a lawyer take on a case, presumably for the same fee that the insurer’s lawyer receives, when there is material risk of no recovery. Basic economics suggest that the lawyer’s time is better served in cases where there is no such risk of no recovery. But the courts and our system wants to make sure the victims have true access to the courts, with lawyers competent to handle the case against the larger, better funded insurance companies.

The concept of a multiplier was designed to compensate for that risk and entice the lawyers to represent the victim-insured.

And that is the theory and rationale behind multipliers.

In practice, though, there is the credible arguments that multipliers were abused. First, the insured’s lawyers charged hourly rates that are, in my humble opinion, disproportionate to the services they provide. And, judges started handing out multipliers in most cases, even when there was no shortage of lawyers able to handle the case.

Particularly in PIP cases, reform is welcome.

FWIW, your fender-bender is NOT a PIP case. Most of us will not have a PIP issue.

The tort reform enacted by DeSantis went far overboard, was not necessary, and truly hurts the people on this State. The reasons have been stated elsewhere and would be repetitive at this point.

 

Appreciate you taking the time to write this!

And agree on the fender bender. My insurance agent and I just got discussing all lines of insurance and the increase in costs.

 

For those who prefer, here is a Twitter thread on the same piece linked to above

 

I think you were responding to a question about personal injury suits... ?

I will add that in the case of property insurance, the huge push was to file before the fee statue expired.

 

That's a well researched article. My wife has been involved in property insurance suits/settlements for more than a decade - on every side. I could tell you some stories! As an attorney, she worked at defense firms, in-house at an insurance company, and even at a plaintiff's firm. Today she works as an independent mediator, and probably 80%+ of the cases she handles are first party property. In her experience, the vast majority of suits filed are for valid claims that are just mishandled. Bad claims handling is a common culprit. But once attorneys get involved, "costs" spiral out of control. $30-$40k in attorney fees is considered "reasonable" by many, and some plaintiff firms have a reputation of coming into negotiations wanting $200k, dwarfing the actual loss incurred by their client.

You do see the occasional claim where someone got in the plaintiff's ear (PA or attorney) and they think they are entitled to a $150k because a water stain appeared on their ceiling 3 years after Irma. But those are the exception rather than the average case. She's also told me multiple stories about someone walking a neighborhood and giving gift certificates to older retirees in exchange for getting to inspect their roof (and assign away their insurance benefits).

 

Wow - very informative and great stuff. Great context.

 

It's not surprising. If a corporation screws up and forces private attorneys to get involved, they're going to look to make a buck off of it. Some will engage in abusive behavior. Of course, at other times, it'll be warranted because the insurance company decided to dick them around and drag the case out instead of doing the right thing.

 

This piece from this morning’s Times revealed something I did not previously know, and is such a disturbing view into the conservative reform mindset in a one party state. Not that anyone has a great idea for the Florida property insurance market, which is primarily hobbled by the fact risk adjusted premiums are unaffordable for the Florida lifestyle we have built for a century.

But the GOP decided to entice formation of start up Florida- specific insurers by incentivizing the ability for partners to take out big profits early and leave the company undercapitalized, getting short term political gain by creating the illusion there were insurers coming into the state to take out policies from Citizens, when it wasn’t even designed to make the crisis better, just to give short term political cover while allowing rent seeking by connected cronies.

The extreme corruption of one party government that has no real fear of political accountability

That includes state Sen. Joe Gruters, R-Sarasota, who has pitched fellow lawmakers on investing in a homeowners insurance company that projects a 165% return on investment over five years.

Investing millions of dollars in one of the nation’s most volatile insurance markets might seem like folly. Hurricanes and floods are multiplying. Meanwhile, numerous companies have gone insolvent without being hit by either of those threats.

However, Florida-based insurance companies employ unusual financial structures that can allow executives to extract considerable profits from homeowners’ premiums.

Those structures, combined with a reduced threat of lawsuits, are enticing at least to some investors. Gov. Ron DeSantis and state regulators see it as the solution to the state’s insurance crisis, hoping that free-market competition will drive down rates.



Big premiums, big profits
Big premiums, big profits - Tampa Bay Times

 

"Free Markets"?

This certainly beats Rick Scott's administration paying Heritage to take Citizens' policies. Just a coincidence that Heritage was a campaign contributor.